(1) Under such conditions, the rate of $40 per thousand board feet to Puerto Rico from the Pacific Northwest could be achieved and maintained. This would meet the best rate obtained to date from any foreign vessel operating in this trade under Public Law 87-877. (2) The current rate of $36 per thousand board feet, Pacific Northwest to Atlantic coast, could be improved upon to the extent that such a ship could operate initially at the rate of $32 per thousand board feet, and after some experience in the trade, could undoubtedly improve upon this rate. The program would entail moving lumber on a ship large enough to carry more than 9 million board feet per cargo, and would be programing cargo moving in quantities currently achieved by the Canadians. In the presentation of this program to the lumber industry, it was pointed out that the program was unworkable unless the industry could guarantee to keep the ship fully loaded during each voyage. It would also be necessary for the lumber industry to gear itself up to handle larger movements of cargo, to be able to deliver such larger quantities to the dock rapidly, and to be able to move it from delivery dock areas to facilitate rapid discharge. To say the least, the lumber industry was barely lukewarm on this proposal. The matter was discussed on more than one occasion with representatives of major lumber producers, all of whom had petitioned for the right to use foreign vessels in the Puerto Rican trade. With the exception of one company, none of the other companies were willing to support the program outlined. This, in spite of the fact that the program would have met the foreign rate on the Puerto Rican movement, and would have reduced the cost of intercoastal shipment of lumber carried on this vessel by more than 12 percent. Other facts presented will indicate that the lumber industry as such is not suffering in any extreme. It has suffered the loss in softwood lumber cargo moving by water, and the general tendency is to emphasize this problem, without paying attention to the fact that lumber movement by water represents a minute fraction of the total American lumber products produced and sold in American and world markets. If the lumber industry plans to meet its competition, it will, among other things, be required to ship in larger quantities and must be able to load and discharge its products on vessels specialized for handling such cargo. The proposal by that segment of the maritime industry represented by AMA would have made available to the lumber industry a type of vessel which has no counterpart under the American flag-a large, fast, specialized lumber carrier different from anything else in operation. The refusal of the lumber industry to support this program certainly is indicative of the fact that the problem is not of such importance as their presentations have led Congress to believe. (Subsequently, a statement was received from Congresswoman Julia Butler Hansen, in favor of S. 2100, which is included in the record at this point, along with several letters and telegrams in support of or in opposition to the bill which were received subsequent to the hearing.) STATEMENT OF CONGRESSWOMAN JULIA BUTLER HANSEN I want to join in urging the extension of the "Puerto Rican exemption to the Jones Act." Senate bill 2100 would make it possible for west coast lumber producers to compete effectively with the Canadians for the Puerto Rican lumber market. This exception was granted last year and it expires on October 23. Thus there is an urgent necessity for all possible speed in enacting this legislation which would extend this authority. Up to 1950, almost all west coast lumber shipped to Puerto Rico was from U.S. mills. However, in 1961, U.S. mills did not ship one board foot of lumber to Puerto Rico, and the annual use in this U.S. Commonwealth had climbed to 70 million board feet. Canadian lumber was supplying the market. British Columbia lumber shippers had taken over a market which historically had been supplied by U.S. producers. Here is the record. The following tabulation of lumber shipments to Puerto Rico shows how the Canadian shipments have increased and U.S. shipments have decreased. One of the more important reasons for Canadian capture of the Puerto Rican lumber market is the cheaper water shipping rate available to the Canadians. In general world charter, shipping rates are lower than rates on U.S. lines. I am told that over 5 million board feet of lumber have been shipped from west coast ports since the permission was granted to U.S. shippers to use foreign vessels. I might mention that in my district in Washington, the port of Grays Harbor has indicated a significant loss in timber movements across the docks due directly to Canadian lumber shipments. In 1952 the United States enjoyed 70 percent of the volume to Puerto Rico, Canada 30 percent. In 1961, there were no shipments from the United States and 100 percent of the 73 million feet originated in Canada. It would seem most appropriate that this exception to the Jones Act be extended so shipments may be made on foreign ships to Puerto Rico. Hon. WARREN G. MAGNUSON, STATES MARINE LINES, Washington, D.C., September 23, 1963. Chairman, Senate Committee on Commerce, DEAR SENATOR MAGNUSON: We understand that the Senate Committee on Commerce intends to hold hearings on S. 2100, a bill to continue, indefinitely, the 1-year suspension (scheduled to expire October 24, 1963) of the provisions of section 27 of the Merchant Marine Act, 1920, with respect to the transportation of lumber to Puerto Rico. States Marine Lines has been informed by the Federal Maritime Commission that since the enactment of Public Law 87-877, which suspended for 1 year the provisions of section 27 with respect to the transportation of lumber to Puerto Rico, 5,497,744 net board feet of lumber (approximately one shipload) has been transported by foreign flag from U.S. ports to Puerto Rico. States Marine Lines has had and will continue to have U.S.-flag vessels available to carry full or part cargoes of lumber from U.S. northwest ports to Puerto Rico. Our rate, based on break-even operation of U.S.-flag ships, would be $50.96 per thousand feet net board measure of lumber in lots of 500,000 feet or more. In 1963 to date, we have had 23 sailings in our U.S. Northwest/U.S. North Atlantic lumber service. These ships could have carried lumber to Puerto Rico in the course of their voyages. Between now and the end of the year, we contemplate six or seven additional voyages, with open space available for Puerto Rico cargo. As you know, foreign-flag rates have been rising, and our position, which was made clear in previous hearings before the Maritime Administration, remains unchanged: U.S.-flag ships are available to carry this cargo. We believe that the extension, if any, of the exemption from the Jones Act should be limited to 1 year. We would appreciate having a copy of this letter placed in the record. Sincerely yours, E. A. TERRES, Hon. WARREN G. MAGNUSON, AFL-CIO MARITIME TRADES DEPARTMENT, Chairman, Senate Commerce Committee, SIR: The Maritime Trades Department, AFL-CIO, has recently learned of the introduction of Senate bill S. 2100 by you and Senator Jackson, which has been referred to the Senate Commerce Committee of which you are chairman. This bill deals with the transportation of lumber from the continental United States to the Commonwealth of Puerto Rico by foreign-flag ships. I wish to advise that this matter was brought to the attention of our executive board members at its recent board meeting in Washington, D.C., September 10 and 11, 1963, and each and every board member voted to have me write a strong letter of protest to you and Senator Jackson relative to the contents of your bill. We are vigorously opposed to this bill inasmuch as the maritime industry at the present time is barely breaking even insofar as the American seaman is concerned. We would like to ask you this question: "What can these foreign-flag ships do for you in your coming election or future elections?" The people who elect and put you in office as a Senator of the United States expect more than what you are giving to the maritime industry at the present time. For your information, I herewith enclose a copy of a resolution entitled "Neuberger Bill," which bill contains the same language as S. 2100, and which was adopted unanimously at our recent board meeting. Further, a copy of this resolution has been forwarded to Senator Neuberger. In the event you have not been advised, the following three lumber companies; namely, the Oregon Lumber Export Co., the Seaboard Lumber Co., and the Simpson Timber Co. booked space on the Tulane, a Norwegian ship, to carry lumber to the Commonwealth of Puerto Rico in March 1963. The Tulane is owned by the Wilh Wilhelmsen Co., of Oslo, Norway, and, further, this ship has operated in the Red China trade. The Oregon Lumber Export Co. and Dant & Russell, Inc., also booked space on the Nias, a Dutch vessel, to carry lumber to the Commonwealth of Puerto Rico in April 1963. The Nias is owned by N. V. Stoomo Maats, Nederland, Amsterdam. This company has also operated in the China trade. This office is making an exact survey of this type of thing and from reports we have received these are the same companies that prompted Senator Neuberger to introduce the Neuberger bill last year. Are these the same companies prompting you at this time? May I call your attention to pages 428, 430, and 431 of the hearings before the Committee on Merchant Marine and Fisheries, House of Representatives, part I, dealing with H.R. 1897 where you will note that Congressmen on this committee share our opinion of the bad taste left with them after the Neuberger bill was passed for 1 year during the 87th Congress. The remarks made in volume 109 of the Congressional Record, page 16067, by Senator Wayne Morse, of Oregon, on this matter are most enlightening and I feel you should take time out and study these remarks wherein you will note Senator Morse brings out the profit and progress of the lumber industry. I only hope and pray that you and Senator Jackson see fit to immediately withdraw this bill inasmuch as your bill and that of Senator Neuberger could be the death of the domestic merchant marine. Awaiting an early reply, I am, Very truly yours, PETER M. MCGAVIN, Executive Secretary-Treasurer. Senator WARREN G. MAGNUSON, Coos Bay, OREG., September 20, 1963. DEAR SENATOR MAGNUSON: The port of Coos Bay is one of the largest lumber shipping ports in the world. Unfortunately, Coos Bay, like other west coast ports, is steadily dropping in east coast lumber shipments. In 1957, 200 million board feet of lumber was shipped to the Atlantic coast; in 1962, only 145,200,000 board feet were shipped which included 3 million board feet to Puerto Rico. This decrease in shipping out of Coos Bay resulted in an actual loss of wages amounting to $1,650,000 as compared with 1957. I wish to point out that the 3 million board feet of lumber shipped from the port of Coos Bay to Puerto Rico in 1962 created additional wages in the amount of $90,000. Could our mills regularly compete in this market, it is obvious that a considerable impact would be made upon our labor force, thus helping stimulate the economic growth our President demands. The following table sets forth the drop from 1957 through 1962: 1 Does not include taxes, pension funds, or other fringe benefits. Projections from the above table show an actual loss of 180 jobs in forest products, plus the service personnel required to support this number of people. The loss of more than 200 positions is a severe blow to a population of less than 25,000. To regain this loss of positions would materially reduce the unemployment so common in Coos Bay. (NOTE.—Average unemployment rate in last 5 years is 7.5 percent. This is above the national unemployment figure.) The figures used in the above table are based on 10 man-hours of work to cut one tree, convert it into lumber, and place it on the carrier in units of 1,000 board feet. The fiscal figure of $3 an hour was obtained by using basic wage rates in the mills ($2.78) and the longshoring cost of $3.19 per hour. No pension plan, vacation pay, taxes, or any other expenditures were considered. Above all, no attempt has been made to estimate profits or demands for new machinery, additional transportation, nor the additional employment related thereto. The relief requested of the Commerce Committee would create a most welcome upward surge in our economy in the Northwest, and the entire Nation would benefit by these additional jobs and the tax receipts which would accrue. Respectfully yours, Hon. WARREN G. MAGNUSON, Senate Merchant Marine Subcommittee, PORT OF COOS BAY, President. WESTERN LUMBER, INC., Aberdeen, Wash., September 18, 1963. DEAR MR. MAGNUSON: We respectfully request that all consideration be given to the extension of the act which allows us at present to ship lumber to Puerto Rico on other than American bottoms. We are enclosing a copy of an article taken from the July 11, 1963, issue of the Aberdeen Daily World, and a picture also of the ship at our dock loading the first shipment of lumber to Puerto Rico. This is direct evidence of our ability to reach a market which has always been unavailable to us. Given adequate time in the future American producers will be much more able to make more use of this market. Basically it does show that given a chance to be competitive we can sell. We sincerely request the extension of this act. C. W. ERICKSON, President and Manager. WEST WATERWAY LUMBER CO., Seattle, Wash., September 18, 1963. Hon. WARREN G. MAGNUSON, U.S. Senator, Washington, D.C. DEAR SENATOR: I am advised that Senate bill S. 2100, a bill to extend the restricted rights of American lumber producers to ship lumber to Puerto Rico on foreign-flag ships, is coming up for consideration by the Senate Maritime Committee. We benefited materially when Seaboard Lumber Co. was granted this right. 1. We were able to move some slow moving low-grade lumber through them. 2. We handled their lumber over our dock to alongside ship. 3. Through the Seattle Stevedoring Co. additional work was made available in Seattle to the stevedores. We are very hopeful that this privilege of shipping on foreign vessels can be extended as we need this outlet to Puerto Rico. Yours respectfully, Senator WARREN G. MAGNUSON, M. A. WHITMAN. President. Coos BAY CHAMBER OF COMMERCE, Chairman, Senate Commerce Committee, DEAR SENATOR MAGNUSON: I have been informed the Senate Commerce Committee will hold hearings to determine the desirability of extending the 1year amendment to the Jones Act that permits the Pacific Northwest cargo lumber industry to use foreign vessels to compete in domestic trade with Puerto Rico. This is to inform you that the Coos Bay Chamber of Commerce supports the "Puerto Rican amendment" and urges its extension. The chamber also considers it most important the subject amendment be engrossed to include the entire Atlantic seaboard and other seaboards concerned with domestic trade, and the period of extension be made for more than 1 year. Preservation of the Pacific Northwest cargo lumber industry is essential to the total economy. The actions the chamber recommends will result in new markets, new production, and more jobs and payrolls for our lumber and port communities. Sincerely, J. H. LENAHAN, President. BELLEVUE WASH., September 20, 1963. Hon. WARREN G. MAGNUSON, Washington, D.C. DEAR SENATOR: Please continue your efforts to extend the Puerto Rican amendment to the Jones Act (S. 2100). As one employed in the lumber industry in the Northwest, I cannot emphasize too strongly the need for this and other assistance to combat the freight disadvantage we find ourselves in when competing with Canada. We ask nothing other than to be permitted a "fair" chance to meet competition in all markets. It is discouraging to encounter an obstacle such as the freight problem and its high cost to our mills and to be, seemingly, so helpless to do something about it. Thanks for your efforts and again, please continue them. Very truly yours, L. N. REDMAN. |